AIIB (What is it?)
- The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank focused on infrastructure and sustainable development.
- It was established in 2015 and is headquartered in Beijing, China.
- Its objective is to promote sustainable economic development, create wealth and improve infrastructure connectivity in Asia and beyond.
Key Features (How does it work?)
- Membership: Has 100+ approved members, including countries from outside Asia.
- Capital: Authorised capital stock is $100 billion.
- Largest Shareholder: China is the largest shareholder and holds the largest voting share.
- Governance: Voting power is linked primarily to members’ capital contributions.
- Credit Rating: AIIB has maintained a AAA credit rating, supporting access to international capital markets.
Areas of Financing (What does AIIB finance?)
- Transport infrastructure
- Energy and power
- Water and sanitation
- Urban development
- Digital infrastructure
- Climate and sustainable infrastructure
India & AIIB
- Founding Member: India is a founding member and among the largest borrowers of AIIB.
- Infrastructure Financing: AIIB supports India in transport, renewable energy, urban infrastructure, water and sanitation projects.
- Strategic Benefit: Provides long-term development finance while diversifying India’s engagement with multilateral financial institutions.
AIIB vs Traditional Development Banks
- Unlike a purely regional institution, AIIB has developed into a global membership-based development bank.
- Its financing increasingly emphasises climate-resilient and sustainable infrastructure.
Conclusion
AIIB has emerged as a major multilateral source of infrastructure finance, complementing existing development institutions. Its focus on sustainable and climate-resilient infrastructure makes it increasingly relevant to Asia’s developmental and connectivity needs.
| This Concept has been Elaborately Discussed in the following Article: BRICS & New Development Bank (NDB) |